Patna High Court
Gopal SharmaversusThe State of Bihar
- Decided
- Disposal
- ALLOWED
Holding
The Court quashed the 80% penalty and the 3% surcharge, fixing a reasonable penalty of 10% of the assessed value (Rs 15,000) and directing release of the vehicle upon payment.
Summary
Gopal Sharma filed a writ petition challenging the Collector‑cum‑District Magistrate's order that imposed a penalty of 80% of the assessed vehicle value (Rs 1,20,000) plus an additional 3% (Rs 3,600) for a car seized after 29.880 litres of illicit liquor were recovered. The petitioner argued that the penalty was excessive, that the valuation ignored the insured value and the quantity of liquor, and that the authority had no power to levy the extra 3% surcharge. The Court examined Rule 12A(2) of the Bihar Prohibition and Excise (Amendment) Rules 2023, which requires consideration of the intoxicant quantity, the owner's involvement, and the latest insurance value, and noted the absence of any such assessment. It also referred to Rule 12A(4) of the 2022 Rules and prior judgments that deem a 75% penalty onerous without proper justification. The Court held the 80% penalty and the 3% surcharge to be illegal, reduced the penalty to 10% of the assessed value (Rs 15,000), and ordered the vehicle's release upon payment of that amount within 15 days. The writ petition was allowed.
Issues considered
- Whether the penalty of 80% of the assessed vehicle value imposed under Rule 12A(2) is lawful and reasonable.
- Whether the Collector‑cum‑District Magistrate was required to consider the insured value and quantity of illicit liquor before fixing the penalty.
- Whether the additional 3% surcharge to the Bihar State Beverages Corporation Limited is authorized under the Bihar Prohibition and Excise Act, 2016.
- Whether the vehicle should be released upon payment of a reduced penalty.
Legislation cited
- Bihar Prohibition and Excise Act, 2016 — s. 30(a), 32(i), 32(iii), 41(1), 41(2)
Subjects
- vehicle seizure
- excise law
- penalty assessment
- insurance value
- illicit liquor
- Rule 12A
- additional surcharge
- writ petition
- quashing order
- release of vehicle
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No. 20882 of 2025
======================================================
Gopal Sharma S/o Jiut Sharma R/o Village- Asudha, P.S.- Durgawati, District-
Kaimur at Bhabua.
... ... Petitioner/s
Versus
1. The State of Bihar through the Commissioner, Excise Department, Patna.
2. The Collector Cum District Magistrate, Kaimur at Bhabua.
3. Sub- Divisional Officer, Bhabua, Kaimur at Bhabua.
4. Sub- Divisional Officer, Mohania, Kaimur at Bhabua.
5. The Superintendent of Police, Kaimur at Bhabua.
6. The Superintendent of Excise, Prohibition, Kaimur at Bhabua.
7. The Station Head of Excise Police Station, Kaimur at Bhabua.
... ... Respondent/s
======================================================
Appearance:
For the Petitioner/s : Mr. Tribhuwan Narayan, Advocate
For the Respondent-State: Mr. S.D. Yadav, AGG-IX
======================================================
CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH
and
HONOURABLE MR. JUSTICE ALOK KUMAR PANDEY
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH)
Date: 28-01-2026
Heard the learned counsel for the petitioner and the
learned AAG-IX for the State.
2. The present writ petition has been filed for setting
aside the order dated 06.11.2025, passed by the learned
Collector-cum-District Magistrate, Kaimur at Bhabhua in Excise
(Vehicle Confiscation) Case No.108 of 2025, whereby and
whereunder penalty has been imposed to the extent of 80% of
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the assessed value, i.e. Rs.1,50,000/- which totals up to a sum of
Rs.1,20,000/-, apart from the petitioner having been also
directed to deposit 3% of the penalty amount, i.e. Rs.3600/- in
the account of Bihar State Beverages Corporation Limited (in
short ‘BSBCL’). The Ld. Collector, Kaimur at Bhabhua has
further directed that upon deposit of the said penalty sums of
Rs.1,20,000/- and Rs.3600/- respectively and producing receipt
thereof within 15 days, action shall be taken to release the
vehicle in question.
3. The brief facts of the case are that an FIR bearing
Bhabhua (Prohibition) P.S. Case No.409 of 2025 dt. 16.06.2025
was registered under Sections 30(a), 32(i), 32(iii), 41(1) and
41(2) of the Bihar Prohibition and Excise Act, 2016 (hereinafter
referred to as the ‘Act, 2016’) against Gopal Sharma (petitioner)
from whose vehicle, i.e Maruti SX4 Car bearing Registration
No. UP65BB-2876, Chasis No. MA3EFJC1500202535, Engine
No. M16AN2043842, 29.880 liters of illicit liquor has been
recovered, leading to the said vehicle being seized.
4. The learned counsel for the petitioner has
submitted that the confiscating authority, i.e. the Collector-cum-
District Magistrate, Kaimur has though by the impugned order
dated 06.11.2025 directed for release of the vehicle in terms of
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Rule 12A (2) of the Bihar Prohibition and Excise (Amendment)
Rules, 2023 (hereinafter referred to as the “Rules, 2023”) on
payment of 80% of the assessed value plus 3% thereof, but the
same is exorbitant and unreasonable, inasmuch as the vehicle in
question was purchased by the petitioner on 29.11.2011 i.e.
about 13 years back. It is further submitted that a bare perusal of
Rule 12A(2) of the Rules, 2023 would show that the Collector
and the authorized officer while imposing penalty should have
due regard to the quantity of intoxicant recovered, involvement
of the vehicle owner and the latest insurance value of the
vehicle, however in the present case the insurance value has not
been considered and instead the value of the vehicle, as assessed
by the Motor Vehicle Inspector, Kaimur at Bhabhua has been
taken into account. Thus, it is prayed that the vehicle in question
be directed to be released upon payment of a reasonable
amount, considering the fact that meager quantity of 29.880
liters illicit liquor has been recovered from the vehicle in
question.
5. Per contra, the learned AAG-IX appearing for the
State has submitted that the impugned order dated 06.11.2025
has been passed in accordance with Rule 12A (2) of the Rules,
2023, nonetheless, he has not been able to deny the fact that
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amount of penalty assessed by the Collector-cum-District
Magistrate, Kaimur at Bhabhua is excessive.
6. We have heard the learned counsel for the parties
and perused the materials on record.
7. At this juncture, we would like to reproduce Rule
12A (2) of the Rules, 2023 herein below:-
“Rule 12A (Release of Vehicles, Conveyance etc. on
Payment of Penalty):-
"(2) The amount of penalty shall be as decided by the
Collector or the Officer authorized by him. While
imposing the penalty, he shall have due regard to the
quantity of intoxicant recovered, involvement of the
vehicle owner and the latest insurance value of the
vehicle. In no case, the penalty should be less than 10%
of the insured value of the vehicle and more than Rs. 5
lakhs. The insured value is the value of the vehicle as
assessed by the insurance company. Where, the insured
value is not available or the Collector or the Officer
authorized by him has reason to believe that the vehicle is
undervalued, he shall get the valuation done by the
District Transport Officer.
In any case, the Collector shall not wait beyond 15
days from the date of seizure and if during this period, the
accused/owner does not pay up the penalty, he shall
proceed with the confiscation/auction."
8. A bare perusal of Rule 12A(2) of the Rules, 2023
would show that while imposing penalty the quantity of
intoxicant recovered as also the insurance value of the vehicle is
required to be considered and in case where vehicle is either
Patna High Court CWJC No.20882 of 2025 dt.28-01-2026
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undervalued or insured value is not available, valuation is
required to be done by the District Transport Officer, however in
the present case, we find that there is no whisper in the
impugned order dated 06.11.2025, either about the insured value
of the vehicle in question being not available or the vehicle
being undervalued, hence the assessment of the value of the
vehicle in question by the Motor Vehicle Inspector, Kaimur at
Bhabhua is patently illegal. Nonetheless, at this juncture we
would like to refer to an order dated 26.11.2025, passed by a co-
ordinate Bench of this Court in CWJC No.14928 of 2025
(Rakesh Kumar Singh vs. the State of Bihar & Ors), wherein it
has been held as under:-
"In absence of any specific ground that the vehicle
was in regular use for transportation of liquors or that
the owner of the vehicle was found involved in
transportation of the liquors and/or there are multiple
cases of similar nature against the owner or the vehicle,
imposition of the penalty to the extent of 75 per cent of
the insured value is an onerous condition and it amounts
to virtually creating a situation where huge hardship may
be caused to an owner of the vehicle in getting release of
the vehicle."
9. Yet another aspect of the matter is that Rule
12A(4) of the Bihar Prohibition and Excise (Amendment)
Rules, 2022 provides that while imposing fine, the Collector or
the officer authorized by him shall have due regard to the
Patna High Court CWJC No.20882 of 2025 dt.28-01-2026
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economic status of the individual, nature of his involvement in
the crime and the quantum of intoxicant recovered, however in
the present case we do not find that such exercise has been done
by the learned Collector while passing the impugned order dated
06.11.2025.
10. Having considered the facts and circumstances of
the case as also taking into account the fact that meager quantity
of 29.880 liters of illicit liquor has been recovered, which is also
one of the factors, required to be considered while imposing
penalty for release of the vehicle, as has been provided under
Rule 12A(2) of the Rules, 2023 and Rule 12A(4) of the Rules,
2022, we are of the view that the penalty imposed by the learned
Collector, Kaimur at Bhabhua is exorbitant and unreasonable,
hence the order dated 06.11.2025, passed by the Collector-cum-
District Magistrate, Kaimur at Bhabhua in Excise (Vehicle
Confiscation) Case No.108 of 2025 to the extent of levy of
penalty of 80% of the assessed value, is quashed. Nonetheless,
we are of the considered opinion that 10% of the assessed value
of Rs.1,50,000/-, i.e. a sum of Rs.15,000/- would a reasonable
amount by way of penalty.
11. The other aspect of the matter is whether the
confiscating authority has the power to impose additional 3%
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penalty over and above the penalty amount. In the present case,
the confiscating authority has directed the petitioner to deposit
additional 3% of the penalty amount, i.e. a sum of Rs.3600/- in
the account of BSBCL which in any view of the matter is
illegal, inasmuch as the confiscating authority under the
provisions contained in the Act, 2016, as amended up to date
has no power to impose an additional 3% penalty over and
above the penalty amount. We further find that the confiscating
authority, on its own cannot impose penalty over and above
what has been sanctioned by law. In this connection, reference
be had to a judgment dated 11.12.2025 passed by a coordinate
Bench of this Court in the case of Shantanu Kumar vs. The
State of Bihar & Ors. (CWJC No. 18561 of 2025).
12. In view of the law laid down in the case of
Shantanu Kumar (supra) as also considering the fact that the
Act, 2016 does not mandate imposition of additional penalty
over and above what has been sanctioned by law, we find that
imposition of 3% additional penalty is wholly unjust and
improper as also is an act of undue enrichment caused to a
government company, which is not permissible under the law. In
such view of the matter, the additional penalty of 3% to the tune
of Rs. 3,600/- imposed vide order dated 06.11.2025 passed by
Patna High Court CWJC No.20882 of 2025 dt.28-01-2026
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the District Magistrate, Kaimur at Bhabhua is quashed.
13. At this juncture, the learned counsel for the
petitioner submits that he would be depositing a sum of
Rs.15000/- within a period of 15 days from today and shall
make available the documents of ownership of the vehicle in
question before the competent authority. In such view of the
matter, we direct that in case the afore-said amount is deposited
before the competent authority within a period of 15 days from
today, the vehicle in question shall be released in favor of the
petitioner, after being satisfied with the documents relating to
ownership of the vehicle within a period of one week, thereafter.
14. The writ petition stands allowed to the aforesaid
extent.
(Mohit Kumar Shah, J)
(Alok Kumar Pandey, J)
Kanchan./-
AFR/NAFR NAFR
CAV DATE NA
Uploading Date 10.02.2026
Transmission Date NA
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